Here we go, you are a person who is so innovative and wants to change the world!
Relax, take a breath, and let’s start to know the stages of investments for startups.
The earliest stage, pre-seed investment, is usually a low amount, pre-start investment. At this stage, entrepreneurs work with a very small team or as a single person. At the pre-seed stage, funding usually comes from family, acquaintances, angel investors, or an incubator. At this stage, it is not easy to say how much investment the entrepreneur will expect to receive.
Seed investment is the basic stage required for the development of the idea. It enables the transition from the idea stage to stages such as product development and market research. This financing can be perceived as the first step of capital towards institutionalization. In this phase, where angel investors are the most common type of investor, funding can be provided by venture capital funds focused on family and acquaintances, incubation centers, and early-stage ventures, in addition to angel investors.
Seed funding is usually between $500K and $2 million but can be less or more depending on the company. The valuation of a company that has completed the seed round generally varies between $3 million and $6 million.
Series A Funding
Series A investments are investments made in startups that have now reached a certain maturity. Here, investors aim not only to support the capital but also to become partners in the venture in terms of the amount of investment they make. At this point, the financing now comes not only from the close circle and angel investors but also from venture capital companies. Investments made at this stage are generally in the range of $2 million to $15 million dollars. In Turkey, a venture capital investments made by the company over $1 million, the series is considered as investments. The valuation of the company that completes the Series A investment round generally varies between $10 million and $15 million.
Series B Funding
A startup that went on a Series B investment round has now reached a certain volume in product sales; It wants to increase its customer base and the number of employees in its team. The Series B investment tour is usually led by venture capital companies invested in Series A and new venture capital companies participate. Here, the investment range is around $7 million to $10 million, and the valuation of the venture is expected to reach $30 million to $60 million.
Series C Funding
Startups that can reach the Series C investment round are companies that have already achieved a certain success and stability, have proven themselves and their products, and have low risk. For this reason, they are seen as an enterprise worth investing for investors in general. At this stage, private equity and investment bankers participate in venture capital. To a new fund; They need it to enter new markets, develop new products, and increase their valuation in acquisitions and public offerings. Although the range for Series C investments is very wide, the average amount is around $26 million.
While the valuation of companies that have completed the C Series is usually between $100 million and $120 million dollars, it is also possible to become a “unicorn” venture with a valuation of $ 1 billion.
Series D Funding
Although most startups leave their investment collection in Series C; The founders of startups that have completed the Series C investment round can sell their shares and “exit”, as well as go to the public offering phase. The Series D round of investments, on the other hand, generally applies to startups seeking to increase their company valuation before going public.
The risk of the Series D investment round; If the company that completes the Series C investment round does not meet the expectations, its valuation may remain below in this round compared to the previous round.
The average amount of Serial D investments, which are generally funded by venture capitals, cannot be determined due to the scarcity of ventures entering this stage and the very wide investment range.
Series E Funding
Companies that cannot meet their expectations, do not want to be offered to the public for a while, or want to increase their valuation before going public, switch to the Series E investment tour.
As is the case with Series D investments, the amount of Series E investments cannot be determined due to the scarcity of ventures moving to this stage, and a large amount of investment.
So How Can I Find The Investment Companies or Funds?
You can browse these links and find some investment companies and also see who invested in what:
Top 8 investment funds:
- BlackRock. AUM: $6.84 trillion
- The Vanguard Group. AUM: $6.2 trillion
- UBS Group. AUM: $3.26 trillion
- State Street Global Advisors. AUM: $3.12 trillion
- Fidelity. AUM: $3.2 trillion
- Allianz. AUM: $2.36 trillion
- JPMorgan Chase. AUM: $1.9 trillion
- Bank of New York Mellon. AUM: $1.9 trillion